July 21, 2024
Australian Senate Committee Rejects Digital Assets Regulation Bill
Policy & Regulation

Australian Senate Committee Rejects Digital Assets Regulation Bill

A significant measure governing digital assets has been rejected by Australia’s Senate Economics Legislation Committee because it is insufficient for putting regulations in place there.

Senator Andrew Bragg of the Liberal Party originally submitted the Digital Assets (Market Regulation) Bill in March to develop a regulatory framework for digital assets, such as cryptocurrencies and CBDCs.

The committee raised several issues on Monday, even though it supports additional industry regulation, according to the committee’s report.

It made clear that Australia’s current financial product rules are well-developed but concluded that additional legislative attention is needed for digital assets.

“The bill lacks the detail and certainty that investors, consumers, and the industry should be provided with,” the committee stated in its report.

Australia is presently in the process of regulating the asset class. Under the current Labor administration, ASIC, the nation’s securities regulator, will initially have more resources thanks to a three-stage strategy. The intention is to tighten security around registration.

As a result of recommendations from the “Australia as a Technology and Financial Centre Senate Select Committee” led by Bragg two years ago, licensing and custody regulations for providers of digital asset services will be reformed in the second and third stages.

The committee’s proposals, which were released on Monday, are expected to impede the legislative procedure but seek to guarantee a more solid and stable framework for the regulation of digital assets in Australia.

The committee cited the legislation’s divergence from worldwide regulatory standards as one of its primary flaws; this worry was raised by numerous inquiry participants.

The committee expressed worry that the bill’s inadequate integration with the current financial regulatory environment could result in regulatory arbitrage, thereby damaging the Australian digital asset market.

Notwithstanding its critiques, the committee praised the Australian Government’s most recent efforts to interact with industry participants, calling them “the most appropriate approach” for future regulation of digital assets.

“Well-designed digital asset regulation can strike the right balance between improved consumer protections and support for industry development,” the committee stated.

The committee is encouraging government officials to carry on its discussions to draft more suitable laws, even if it has halted further legislative action.

Image: Freepik

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